US inflation for February — CPI data due Tuesday

Consumer inflation data from the US is due at 1230 GMT Tuesday 13 March
I popped up a preview of it yesterday here ICYMI: 

  • expect a much more modest outcome this month.

Previews now via …Barclays:

  • We forecast headline CPI to rise 0.1% m/m and 2.1 % y/y. For core CPI, we expect some reversal of the strength in January and forecast an increase of 0.1% m/m and 1.7% y/y. For the NSA CPI index, we expect a reading of 248.8.

Commerzbank:We expect inflation pressure to increase gradually, which should be confirmed by  …  data releases

  • At the same time, retail sales should point to a noticeable gain in private consumption in February

One month ago, reports about an unexpectedly sharp rise in US consumer prices shocked the markets. In particular, the above-average rise of 0.3% versus December in core inflation spooked investors.

  • However, we think that after years of very low inflation an abrupt change to overshooting is not very likely.
  • Note that in 2013, 2016 and 2017 a core rate of 0.3% was reported for January — without inflation increasing on a sustainable basis. We are inclined to believe that such figures underpin our long-held view that inflation is gradually rising due to high capacity utilisation in the economy

Inflation pressure arises from several sources.

  • The tighter labour market is driving wages, which should mainly be reflected in higher prices for services.
  • As for goods prices, the main price driver is the softer dollar.
  • In addition, the higher oil price not only directly increases energy prices but also indirectly works to make transportation more expensive.

February consumer prices

  • we forecast a core rate of 0.2% (consensus: 0.2%), which would be lower than in January and more in line with the trend of the last six months. In fact, the exceptional 1.7% increase in prices for clothing observed in January — the highest monthly increase since February 1990 — was probably owed to the winter weather, whereas price discounts were more likely again in February given the mild temperatures.
  • For prices for all goods and services, we also forecast +0.2% (consensus: 0.2%). The year-on-year rate should thus rise from 2.1% to 2.3%, while remaining at 1.8% for the core CPI.

TD Securities:

  • We expect headline CPI to accelerate to 2.2% y/y, with core CPI printing a 0.2% m/m increase which should push the y/y pace to 1.9%.
  • While favorable, we do not look for the strength in January to be repeated given benign imported consumer good inflation and the potential for certain January one offs (apparel) to correct.

(bolding mine)
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